Suo moto cancellation of GST registration means cancellation of registration under GST laws by the tax officer on his motion. However, the provisions of Section 29(2) of the CGST Act mandate that the officer provides his reasons for initiating such suo moto cancellation of registration.

Condition to be satisfied for suo moto cancellation of GST registration

Suo moto cancellation by the tax officer can be initiated if any one of the following conditions is satisfied:

The taxpayer has registered their business through fraud, suppression or misrepresentation of facts.

The taxpayer has failed to apply for GST enrolment within 90 days from the appointed date or any such extended date as may be prescribed.

The taxpayer has failed to file returns for six months consecutively. The criteria for filing returns is three months in the case of a composition taxpayer.

The taxpayer has indulged in supplying goods or services without the issue of an invoice in violation of the provisions of the CGST Act to evade taxes.

It is observed that the taxpayer has issued an invoice without a supply of goods or services, thereby again violating the provisions of the Act to evade input tax credit or get a refund of tax.

Failure to deposit taxes collected with the treasury within 90 days.

Failure on the taxpayer’s part to pay taxes, interest or penalty to the government within 90 days.

Display of misconduct during any proceedings under the GST Act.

It is observed that a person is not liable or has ceased to become liable for deduction or collection of taxes under GST laws.

If the business constitution is a sole proprietorship, upon the death of the sole proprietor.

In the event of amalgamation, transfer, merger, demerger and the like of a business.

If there is a change in the constitution that leads to a change in PAN

In the event of discontinuation of closure of businesso

Procedure to be adhered to for suo moto cancellation

  • GST law mandates that the tax officer serves show-cause notice to the taxpayer, providing him with an opportunity of being heard. The taxpayer, in response to the show-cause notice, needs to explain why the registration should not be cancelled. The taxpayer is bound to respond to this notice within seven working days.
  • Basis the response received, the tax officer can choose to either drop the cancellation proceedings initiated if he is satisfied with the response provided, and the same would be intimated to the taxpayer by SMS or e-mail.
  • If no response is received from the taxpayer within seven working days or the tax officer is not satisfied with the response received from the taxpayer, he can go ahead cancelling the registration.

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